Definitions

Government and Economy

Democracy: The members of a democratic government are chosen by elections, and most or all of the citizens have the right to vote. There are many different types of democracies, but historically most are republics where the people elect representatives to enact and enforce laws.
Capitalism: An economic system in which people have the right to own property and businesses and can decide how to spend their own money. Capitalism has a high level of freedom of choice, but in exchange for this freedom people are responsible for many aspects of their lives.
Socialism: An economic system in which the government has some level of control over businesses and sets most wages and prices. Economic freedom is limited. In most cases, socialism is focused on "equality of outcome&qout;, meaning it wants its citizens to enjoy a similar economic level and quality of life.

Inflation: Inflation occurs when the price of goods and services rises, reducing the spending power of existing money.
Hyperinflation: Inflation that is very rapid and severe: for example, the average price of all goods and services rising more than 50% in a month. Hyperinflation quickly drains the value of money to near worthlessness and has many harmful effects. People spend all of their earnings and savings as quickly as they can and resort to hoarding and bartering. Both people and businesses are hit hard by not being able to hold on to money and no one wants to loan money or invest in business.